Egypt's GB Auto sees home market shrinking after strong Q4
Reuters, Wednesday 6 Mar 2013
Despite seeing growth in net income in the fourth quarter of 2012, Egypt's largest car assembler expects a drop in the automotive market in 2013

Egyptian vehicle assembler and distributor GB Auto said on Wednesday its net income grew 74.2 percent year-on-year in the fourth quarter, but forecast the local car market would shrink in the coming year.

Fourth-quarter net income rose to LE75.90 million ($11.3 million), despite what Chief Executive Raouf Ghabbour said was a "truly volatile environment", while revenue was up 25.4 percent to 2.35 billion.

Earningsbefore interest and tax (EBIT) reached LE205.2 million, a 55.5 percent increase. GB Auto ended the year with 28.9 percent of the Egyptian passenger car market, down slightly from a year earlier.

Egypt is beset by a political and economic crisis, with foreign exchange in increasingly short supply.

"Egypt's foreign exchange environment and the expected deterioration of the macro (economic) climate in a high-inflation environment will see the Egyptian passenger car market shrinking in the coming year," Ghabbour said in a statement.

However, he added that new North Africanbusinessshould make an immediate positive contribution.

"We are confident that our strategy for this year will see us post bottom-line growth and improve our margins in Egypt, while seeing both Algeria andLibyamaking positive contributions to profitability from year one, essentially providing buffers to challenges in our home market."